Great Eastern Shipping Co. Ltd. v. Far East Chartering Ltd. and Anr (The “Jag Ravi”) – English Court of Appeal, 9 Mar 2012

LETTER OF INDEMNITY – WRONGFUL DELIVERY – Owner Award In upholding the Commercial Court’s ruling of 27 May 2011 (background details previously recapped in The TANKVOYager, Vol. 18, No. 1), the Court of Appeal held that the Owners are protected under an LOI issued by the Receivers to the Charterers. Despite the Owner being unaware of the LOI, the Owner was protected by it on the basis that the Owner was acting as the Charterer’s agents when delivering the cargo. The Appellate Court held that "delivery" is a legal concept that does not mean “discharge” and that the Owner need not physically hand over the cargo to the Receiver; rather Owner’s obligation was fulfilled by surrendering possession and power relating to the cargo when delivering to the port authority. With regard to the public policy argument in the Receiver’s attempt to preclude Owner’s protection under the LOI, the court held that the Owner was incapable of a deliberate wrongdoing as the Owner was unaware of a dispute between the sellers and the intermediate buyer; furthermore, this was deemed a commercial dispute (not a public policy issue).
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